Inventory turnover Ration

1. SUPPLY CHAIN MANAGEMENT
HPM Chemicals & Fertilizers Ltd.
PPT.KUNZITE.01 Version 00.2021
By: SUNIL CHAWLA

2. • Measure of the number of
times inventory is sold and
replaced in a time period.
• Ratio is calculated by
dividing Sales by Inventory.
• The time period is typically a
year but can be shorter.
PPT.KUNZITE.01 Version 00.2021
Inventory Turnover Ratio

3. PPT.KUNZITE.01 Version 00.2021
Why Inventory Turnover Ratio

4. PPT.KUNZITE.01 Version 00.2021
Why Inventory Turnover Ratio

5. PPT.KUNZITE.01 Version 00.2021
Why Inventory Turnover Ratio

6. PPT.KUNZITE.01 Version 00.2021
What is Cost of Goods Sold (COGS) ?

7. PPT.KUNZITE.01 Version 00.2021
What is Average Inventory (AI) ?

8. PPT.KUNZITE.01 Version 00.2021
ITR Good Or Bad ?

9. PPT.KUNZITE.01 Version 00.2021
Average
Inventory=Opening
Stock + Closing
Stock divided by 2
Inventory Turn Over
Ratio= Net Sales Done
from Plant wise divided
by Average Inventory
No. of Days in
Year/Inventory
Turnover ratio
Average Inventory Inventory Turn Over Ratio
Days of
Inventory on
hand
North Karnal 2,544 163 329 246 10 35
North Ldh-Local 3,297 372 245 309 11 34
North Jaipur 810 83 52 67 12 30
North Sriganganagar 327 87 43 65 5 73
North Total 6,978 705 669 687 10 36
Inventory Turnover Ratio 2020-2021
SALES DONE
(From Plant)
Depot Name
Zone
Opening Stock
(April-2020)
Closing Stock
(March-2021)
Good Ratio is between 5 to 10 .

10. PPT.KUNZITE.01 Version 00.2021

11. PPT.KUNZITE.01 Version 00.2021
12 Ways to Reduce Inventories